Pensions Lawyers: Advice for Businesses

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Pensions Lawyers: Advice for Businesses

Your business has to provide pension arrangements for your employees, but are you getting the best advice on how to implement and develop those schemes, and manage the duties and liabilities they place on you as an employer?

At JMW, our wide experience and expertise in advising and working in all areas of workplace savings mean that we can help your business better manage its pension arrangements, achieve cost savings and risk reductions, and ensure employees’ workplace savings are best protected.

Working with our clients on a highly personalised, partner-led basis means we can ensure your business receives the most appropriate commercially-minded solutions to your pension needs.

To speak to a solicitor for pensions advice for your business, contact JMW today by calling 0345 872 6666, or fill in our online enquiry form to request a call back. If you’re looking for personal pension advice, please visit our dedicated page.

How JMW Can Help

We offer a comprehensive range of services covering all aspects of pensions law. From setting up new private or public sector pension schemes to compliance issues, dealing with regulators, and addressing employee disputes, we can handle all your pension-related legal needs.


Employers are under a legal duty to put in place an auto-enrolment-compliant pension scheme. It is important that you understand what those duties are and are certain that you are compliant. This can include ensuring your documentation is up to date, calculating and deducting contributions correctly, and satisfying the Pensions Regulator that you are compliant.

You will face financial sanctions, naming and shaming and potential court action if you get things wrong, so let JMW help you get things right.

Our pensions lawyers can:

  • Advise in detail on how to comply with your duties under auto-enrolment legislation
  • Keep you up to date on legislation as it changes and develops
  • Provide a document and procedure review service to ensure compliance
  • Give practical advice on options to develop your pension arrangements

Trust-based Schemes

Businesses with either defined benefit or money purchase schemes come under increasing pressures on scheme funding, covenant strength, and providing value for money for members. At the same time, employers have opportunities to restructure their schemes to manage them more cost-effectively, or buy out with an insurer to divest themselves of pension scheme risk.

Employers must develop and maintain constructive relationships with their scheme trustees. It is important to ensure that scheme sponsors take advice and plan for the future of their employees’ pension scheme to take advantage of the best ways to secure employees’ pension savings in the most cost-effective way for their business. 

JMW can:

  • Advise on merging schemes to achieve costs savings and improved funding and security
  • Help you during solvent restructuring to apportion pension liabilities to other parts of your business
  • Project manage a buyout of pension scheme liabilities
  • Deliver bulk transfers of pension scheme members to centralised schemes to reduce administration costs and achieve better risk management
  • Manage engagement with the Pensions Regulator

How Much Should Employers be Contributing to the Pension Scheme?

Under UK pension law, employers are required to contribute to their employees' pensions as part of the auto-enrolment scheme. The amount that you, as an employer, must contribute is a percentage of the employee's qualifying earnings, which is a band of earnings set by the government each tax year.

As of the current legislation, the minimum total contribution to an employee's pension scheme is set at 8% of their qualifying earnings. Of this, the employer must contribute a minimum of 3%. The employee must make up the difference, which is 5% of their qualifying earnings. Please note that these rates are subject to change as per the latest government regulations.

It's also important to highlight that these figures are minimum requirements. You may choose to contribute more to your employees' pension schemes if your business finances allow it. Offering a more generous pension scheme can be a valuable incentive when recruiting and retaining staff.

Employers can arrange for employees’ contributions to their workplace pension to be made through salary sacrifice. Such arrangements allow for an employee to agree to a reduction in their contractual gross earnings and, in exchange, the employers pays the employees’ contributions to the scheme. This results in the employer and the employee paying reduce National Insurance contributions.

What are the Different Types of Pension Schemes Available for Businesses?

There are several types of pension schemes available, and choosing the right one depends on a variety of factors including the size of your business, the nature of your workforce, and the resources you have available.

Defined Benefit Pension Schemes

Also known as 'final salary' or 'career average' pension schemes, these guarantee a specified income upon retirement based on the employee's earnings and length of service. These schemes are increasingly less common due to their high cost, but they provide significant security for employees.

Defined Contribution Pension Schemes

Also known as 'money purchase' schemes, in these pensions, the money contributed by both the employee and employer are invested. The amount available at retirement depends on the contributions made, the returns on the investments, and the annuity rates available at retirement. They are less predictable than defined benefit schemes but are more common due to their lower cost for employers.

Auto-Enrolment Pension Schemes 

Under UK law, most employers must automatically enrol eligible employees into a pension scheme and contribute towards it. Many businesses use defined contribution schemes for auto-enrolment, and there are specific schemes, such as the government's NEST (National Employment Savings Trust), designed to meet the requirements of auto-enrolment.

Small Self-Administered Schemes (SSAS)

These are occupational pension schemes that provide cash benefits on retirement. They are established individually, often by directors of a company for specified employees, and can have up to 12 members.

Group Personal Pensions (GPP)

These are essentially a collection of individual personal pension arrangements, organised collectively by an employer. They are contract-based and the contract is between the individual and the pension provider.

Each type of scheme has its own benefits, drawbacks, and responsibilities, and understanding these can be complex.

Is it Illegal for an Employer Not to Pay a Pension?

Under UK law, specifically the Pensions Act 2008, every employer, regardless of the size or type of their business, is required to provide a workplace pension scheme for eligible staff and to make contributions towards it. This is commonly referred to as 'auto-enrolment'.

An employer is generally required to enrol workers who:

  • Are not already in a suitable workplace pension scheme
  • Are aged between 22 and State Pension age
  • Earn more than £10,000 a year in the 2023/24 tax year
  • Work or usually work in the UK

An employer who fails to meet these obligations can face enforcement action from the Pensions Regulator, which can include substantial fines and legal proceedings.

However, it is also important to note that not all employees may qualify for auto-enrolment depending on factors such as age, earnings and employment type. It is always recommended that both employers and employees familiarise themselves with the specific rules around workplace pensions to ensure compliance and protect their rights.

What are the Penalties for Non-compliance with Pension Regulations?

The Pensions Regulator has the power to enforce a range of penalties for non-compliance with pension laws, particularly concerning the auto-enrolment obligations set out in the Pensions Act 2008.

  • Informal Action: The Pensions Regulator may issue guidance and advice to help an employer meet their responsibilities.
  • Statutory Notices: If non-compliance continues, statutory notices may be issued, requiring the employer to fulfil their duties by a certain deadline.
  • Penalty Notices: For continued non-compliance, the Pensions Regulator can issue fixed or escalating penalty notices. A fixed penalty notice incurs a fine of £400. If non-compliance continues, an escalating penalty notice may be issued. The daily fine varies depending on the size of the business, ranging from £50 to £10,000 per day.
  • Unpaid Contributions Notice: If an employer has not paid contributions on time, the Pensions Regulator can demand that these are paid, and the employer may also have to pay interest on the overdue amount.
  • Prohibited Recruitment Conduct Penalty Notice: Employers can also be fined if they are found to be encouraging or forcing employees to opt out of a pension scheme. The fines range from £1,000 to £5,000 for individuals and from £1,000 to £50,000 for organisations.
  • Civil Penalties: For more serious breaches, such as failure to pay contributions that are due, the Regulator can impose a civil penalty of up to £5,000 for an individual and up to £50,000 for an organisation.
  • Criminal Sanctions: In the most serious cases, non-compliance with pensions law can lead to criminal prosecution.

The penalties for non-compliance can be severe, making it crucial that employers understand and fulfil their obligations. JMW offers expert guidance and support to help businesses navigate the complexities of pensions law, ensuring compliance and helping avoid costly penalties.

Why Choose JMW?

Our team of dedicated pension lawyers has extensive experience in advising businesses on their pension obligations in an easily understandable manner. We not only bring in-depth knowledge of the law but also provide practical solutions tailored to your business needs. Our track record includes working with a diverse range of businesses, from startups to multinational corporations, across various sectors.

We value our clients and aim to build lasting relationships based on mutual trust and respect. Our approach is always tailored to your specific needs and circumstances. We ensure clear and timely communication and aim to make the legal process as straightforward as possible for our clients.

The pensions team works collaboratively across various departments within JMW, ensuring you have access to a broad range of expertise. If your pension issues intersect with employment law, corporate law, or any other area, we can seamlessly bring together the right team to provide holistic solutions.

JMW has received recognition from leading industry and directories, such as the Legal 500 and Chambers UK. This underlines our reputation for providing high-quality legal services.

FAQs About Pensions for Businesses

What is the role of a pension lawyer?

At JMW Solicitors, our pension lawyers play a crucial role in navigating the complex world of pension law. This profession is focused on interpreting and applying laws related to pensions and retirement plans.

The primary responsibilities of a pension lawyer include providing expert legal advice on pension schemes and retirement planning to businesses, trustees and individuals. This can involve designing, implementing and administering both occupational and personal pension schemes. Our lawyers also advise on regulatory compliance, ensuring that all parties adhere to current pensions legislation.

The role is also concerned with the management and resolution of pension disputes. If an issue arises, such as an alleged breach of trustees' duties or a disagreement over the terms of a pension scheme, our pension lawyers will advise on the best course of action, and if necessary, represent clients in court proceedings.

Furthermore, pension solicitors are involved in business transactions, such as mergers and acquisitions, where they assess the potential impact and risks associated with the pension schemes of the companies involved. This could involve performing due diligence, identifying potential liabilities and providing advice on the restructuring of pension schemes.

Moreover, they regularly liaise with regulatory bodies, such as the Pensions Regulator and the Pension Protection Fund, to ensure that clients are compliant with their obligations and responsibilities.

How can I choose the most suitable pension scheme for my business?

There are several key considerations that employers should keep in mind when choosing a pension scheme:

  • Compliance with Legislation: Your pension scheme must comply with UK law. This includes meeting the auto-enrolment requirements under the Pensions Act 2008, which mandates that businesses provide eligible employees with a qualifying pension scheme and make contributions towards it.
  • Affordability: Evaluate the financial implications of different pension schemes to ensure that the one you choose is sustainable and affordable for your business. This will require consideration of your own contributions, administrative costs, and any additional expenses that may be incurred.
  • Employee Needs: The pension scheme you choose should meet the needs of your employees. Consider factors such as their age, salary, employment status, and retirement goals. Some employees may prefer a scheme with higher contribution rates or added flexibility, while others may value stability and security.
  • Ease of Administration: Some pension schemes are more complex to administer than others. You will need to consider the resources your business has available to manage the pension scheme, including time, personnel and systems. Some providers offer additional support and services to help manage the scheme effectively.
  • Provider Reputation and Financial Strength: The pension scheme provider you choose should be reputable and financially stable to ensure the security of your employees' pensions. Investigate their track record, performance and customer service capabilities.
  • Investment Opportunities and Performance: Different pension schemes offer various investment opportunities, which can affect the growth of the pension pot. Consider the investment options, risk levels, and historical performance when choosing a scheme.

At JMW Solicitors, our experienced pension lawyers can guide you through the process of selecting a pension scheme. We offer expert advice tailored to your specific circumstances, ensuring your business complies with its legal obligations while meeting the needs and expectations of your employees.

How can I ensure my company's pension scheme is fair and beneficial for all employees?

Here are some steps you can take to ensure your pension scheme benefits all employees:

  1. Understanding Employee Needs: Different employees will have different needs when it comes to pensions, based on factors like age, income level, personal circumstances, and retirement goals. Regularly consult with your employees to understand their needs and align your pension scheme accordingly.
  2. Clear and Regular Communication: Make sure all employees understand the pension scheme and its benefits. Regularly update them on any changes and provide educational resources to help them make informed decisions about their retirement planning.
  3. Offering a Competitive Scheme: Aim to offer a pension scheme that is competitive within your industry and region. This not only benefits current employees but can also help attract new talent to your company.
  4. Compliance with Auto-Enrolment: Ensure that you are compliant with auto-enrolment laws. Auto-enrolment is designed to be inclusive, and by meeting your obligations, you can help ensure fairness.
  5. Seek Professional Advice: Seek advice from pensions experts, like us at JMW Solicitors, to ensure that your pension scheme is fair, compliant with laws, and beneficial to your employees. Professional advice can help you navigate the complexities of pensions and make the best decisions for your employees and your business.
  6. Review Regularly: Regularly review your pension scheme to ensure it continues to meet the needs of your employees and your business. Consider factors like investment performance, administrative costs, and employee satisfaction.
  7. Consider Equalities Legislation: Ensure that your scheme does not discriminate against any group of employees, in line with equalities legislation. This could relate to factors like age, gender, or part-time status.

By following these steps, you can work towards offering a pension scheme that is both fair and beneficial to all your employees. We can provide expert advice to help you meet these objectives and fulfil your obligations as an employer.

What are the implications of an employee opting out of the pension scheme?

When an employee decides to opt out of a pension scheme, it means they choose not to contribute a portion of their earnings to the scheme. Here are some of the implications:

  • Employer Contributions: When an employee opts out, not only do they stop contributing to their pension, but so does the employer. This means the employer will no longer need to contribute to that employee's pension fund, which could lead to short-term savings for the company.
  • Employee Retirement Savings: For the employee, opting out means they will have fewer savings accumulated for their retirement. This might make them more reliant on the state pension, which might not provide the same level of financial security as a workplace pension.
  • Re-Enrolment Requirements: Under UK law, employers must re-enrol eligible employees back into the pension scheme approximately every three years, even if they have previously opted out. Employees then have the choice to opt out again if they wish. This means that businesses need to maintain accurate records and ensure they comply with re-enrolment duties.
  • Workplace Relations: If many employees are opting out, it could indicate that they do not see the value in the pension scheme or they do not fully understand it. Employers might want to consider whether they need to provide better education about the scheme and its benefits, or consider changes to the scheme that could make it more appealing to employees.
  • Regulatory Compliance: Employers must not encourage or force employees to opt out of a pension scheme. Doing so can lead to substantial fines and other penalties.

Talk to Us

If you’re looking for pensions advice for your business, contact JMW Solicitors today. Call us on 0345 872 6666, or fill in our online enquiry form to request a call back.